Tesla's about to face investors at one of the most surreal points in its history

Tesla will report its first-quarter earnings after the bell on Wednesday. This routine financial event that's never really routine for Tesla is happening at a particularly surreal moment for the often surreal company.

Tesla's market cap has increased by $20 billion since the beginning of 2017; it's almost as if Tesla has added an entirely new and highly profitable enterprise to its balance sheet, which of course it hasn't. In fact, last year Tesla acquired struggling SolarCity for over $2 billion and assumed several billion more in SolarCity debt.

The $323-a-share stock price is a prediction of the future — a claim on future earnings, as any investor will tell you. But that brings us to Tesla's Q1. Here are the three main things that Wall Street will focus on:

1. The bottom line

Analysts expect Tesla to post another loss, something on the order of $0.75 per share, about half what the company lost in the same quarter last year. Revenue should be way up from Q1 '16, thanks to increasing volume. Overall, however, drawing a good bead on Tesla's profits or lack thereof has become vastly more complicated since the SolarCity merger. For the time being, a sort of loose consensus has emerged saying that for the short term, SolarCity adds effectively nothing to the total value of Tesla shares. So all eyes will likely continue to be on the auto business.

Cash burn could also be a factor. Tesla expects to spend $2.5 billion in 2017 to launch its new car, the Model 3. That's most of the cash currently on the balance sheet. On the plus side, Tesla's cash discipline has been improving. Even though it said that it would spend and spend and spend in 2016, it wound up with a larger-than-anticipated pile of money in the bank.

Bigger than the Big Three? Andy Kiersz/Business Insider

2. Vehicle deliveries and Model 3 update

Tesla has made the exasperating decision for a decade-old carmaker to get cagey about how many vehicles it can actually sell in a given year. In 2015 and 2016, the company fell short of its guidance, although it grew sales substantially (roughly doubling them). In 2017, rather than providing full-year guidance, Tesla supplied first-half guidance of 50,000.

This was probably due to the arrival of the Model 3, a $35,000 mass-market car that's going to account for the lion's share of CEO Elon Musk's expected deliveries of 500,000 by the end of the next year, an almost comically ambitious target. The Model 3 will need to be integrated into Tesla's existing Model S and Model X production, so in 2017 the actual manufacturing of Tesla's luxury vehicles could be constrained.

As for the Model 3, the markets are expecting a July launch, which is earlier that many longtime Tesla-watchers were counting on last year, when sometime in the fourth quarter seemed like the best bet. Tesla has made the potentially disastrous decision to rush the Model 3 — or at least a few vehicles — out the factory door, electing to bypass the beta-testing phase and going straight to stage one of full-on production. In the auto industry, this news has been greeted with disbelief, even among Tesla enthusiasts. But Musk's idea is that there won't be so many early cars on the road that Tesla won't be able to make adjustments on the fly.

They can work with software. A few thousand pounds of an automobile is another story.

The Model 3. YouTube/Motor Trend

3. Distractions

There's undoubtedly going to be some attention paid to marginal stuff, such as Autopilot software updates and whatever Tesla is scheming on ride-sharing, not to mention some promised new vehicles, ranging from a semi-truck to a pickup. But at this juncture, we're heading for a serious reckoning with what Tesla says it will do and what it can actually do.

Much of the company's market cap prior to the recent run-up hinged in Model 3 execution. Adding another $20 billion, without so much as a single operational vehicle in the hands of a customer on the road, will create an insane amount of pressure on Tesla's ability to build vehicles in volumes that would be considered acceptable to a major carmaker.

Tesla delivered about 25,000 cars in the first quarter, putting it on pace to meet its 50,000-vehicle guidance for the first half. However, it raises the question of whether production will increase enough in the second to improve on 2017's 76,000 in total deliveries.

It's fundamentals time for Musk. Tesla either rolls the cars or it doesn't. If it can't go from a vague 100,000-ish 2017 deliveries guidance numbers to Musk's goal of 500,000 by 2018 and a million by 2020, then investors' patience will be tested.

Not a Tesla. Yet. Paramount Pictures

BONUS

Can Tesla make money on the Model 3?

No one seems to be much asking this question, assuming that something on the order of 500,000 pre-orders for the Model 3 means that Tesla will be sleeping on a mattress stuffed with money if it can satisfy that demand. The company argues that it could be looking at margins on its current high-ticket Model S and Model X of 20%-30%, which would be among the best in the industry (by contrast, across its entire global lineup, Ford predicts a total profit margin for 2017 of 9%).

However, expensive luxury cars are typically quite profitable, mainly because their basic costs aren't that much greater than the mass-market vehicles they're often based on (numerous Lexuses have their core DNA in Toyotas). Mass-market cars, on the other hand, are not very profitable.

It's safe to assume that the first Model 3's will be a bit pricier than $35,000. And while we're calling the vehicle a mass-market car, that simply means that more people will be able to buy it than can afford the S or X. In fact, $35,000 is pretty much the average transaction price for all vehicles in the US.

A $50,000-ish sticker would make the Model 3 more of a near-luxury vehicle. But if Tesla wants to be selling a million vehicles, mostly Model 3's, by 2020, cheaper cars will have to be offered. And the cost of building them could obliterate Tesla's balance sheet.

It's the elephant in the room. It might be discussed on Wednesday. But probably not.